CMS Energy Corporation (CMS)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 227,000 | 164,000 | 452,000 | 32,000 | 140,000 |
| Short-term investments | US$ in thousands | — | — | — | 136,000 | — |
| Receivables | US$ in thousands | 473,000 | 2,243,000 | 1,429,000 | 1,594,000 | 1,552,000 |
| Total current liabilities | US$ in thousands | 2,895,000 | 2,985,000 | 2,204,000 | 3,074,000 | 2,704,000 |
| Quick ratio | 0.24 | 0.81 | 0.85 | 0.57 | 0.63 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($227,000K
+ $—K
+ $473,000K)
÷ $2,895,000K
= 0.24
The quick ratio measures a company's ability to meet its short-term liabilities using its most liquid assets. In the case of CMS Energy Corporation, the trend in the quick ratio over the past five years shows some fluctuation.
In 2023, the quick ratio decreased to 0.65 from 0.77 in 2022, indicating a lower ability to cover current liabilities with liquid assets. This decline may raise concerns about liquidity management in the current year.
Looking back, the company's quick ratio has varied over the years, with the highest ratio of 0.87 in 2021 and the lowest of 0.50 in 2020. Despite the fluctuations, the quick ratio generally remains below 1.0, suggesting that CMS Energy may have a limited ability to cover its short-term obligations using only its current liquid assets.
Overall, while the quick ratio provides insights into CMS Energy Corporation's short-term liquidity position, the fluctuating trend indicates the need for further analysis to understand the company's liquidity management strategies and potential risks.
Peer comparison
Dec 31, 2023